How Vistra and FlexGen Made the Largest Battery in Texas Pencil Out

Julian is a staff writer at Greentech Media, where he reports on energy storage, solar power and other clean energy sectors. He also has experience covering clean transportation, state and federal energy policy, and climate adaptation. Previously, Julian reported for CityLab at The Atlantic and conducted grant-funded climate change reporting in Bangladesh. He graduated from Duke University.

A former military microgrid developer will build the biggest battery storage system in the historically tough Texas market.

Power producer and retailer Vistra Energy this week chose FlexGen to build its 10-megawatt/42-megawatt-hour storage system at the 180-megawatt Upton 2 solar plant in West Texas.

This will be the largest battery operating in Texas upon completion, expected by the end of the year. Duke Energy's Notrees plant has a larger power capacity, but stores fewer megawatt-hours.

Upton 2 also proves out the economics of large-scale storage retrofitted onto existing solar plants, as opposed to the standalone storage or greenfield solar-plus-storage common in the industry so far.

Vistra said in an analyst briefing that, at peak solar times, the plant generates nearly 20 megawatts more than it can export under its interconnection arrangement. The AC-coupled battery will allow it to capture some of that energy that would otherwise be wasted.

The economics of the storage retrofit benefitted from eligibility for the federal Investment Tax Credit, use of existing site and energy arbitrage opportunities, the briefing noted.

This marks the second front-of-the-meter battery project for FlexGen, which is led by Navy veteran Josh Prueher. After serving in Iraq and Afghanistan, and a subsequent stint in investment banking, Prueher founded the company in 2009 to provide distributed energy systems for deployment in battlefield environments.

The business later moved into storage-backed microgrids to reduce fuel consumption and ensure power quality at remote oil and gas facilities. FlexGen deployed its first grid-tied storage in 2016 with a DC-coupled solar-plus-storage system in Puerto Rico.

In just a couple of years, FlexGen has assembled a 525-megawatt-hour pipeline for solar-paired storage, mostly retrofits on existing utility-scale solar plants, Prueher said.

“Adding storage to existing solar sites, particularly DC-coupled, is the lowest-cost way to deliver scaled storage attributes for their system,” he said.

DC-coupled architecture runs energy from solar modules and batteries alike through the same power conversion, saving on equipment costs and round-trip efficiency.

Whereas the early landmark solar-plus-storage projects have been new builds, a growing number of utilities have found themselves seeking additional flexibility services without needing more renewable generation at the time. Storage retrofits make a lot of sense for that context.

They leverage existing solar generation, some of which might be wasted when it exceeds the project's interconnection limit. The retrofit piggybacks on work done already to prepare the site for a power plant, such that it can be cheaper to add the storage capacity there than it would be in a new site.

Those factors helped make the Upton 2 project work despite Texas being a historically difficult market for storage development.

The Texas regulatory environment has been challenging for storage, noted Ravi Manghani, energy storage director at GTM Research. Oncor and AEP Texas have pushed to make storage available for distribution utility ownership, without success. That relegates it to the generator context.

Meanwhile, grid operator ERCOT lacks a capacity market, so storage cannot pursue that value stream like it could in California through resource adequacy payments.

“The Public Utility Commission of Texas has finally indicated interest in addressing the broader policy questions on treatment of storage, so there may be a thawing of policies in the coming years,” Manghani said.

The rise of Texas solar adds urgency to the storage policy debates. ERCOT has 27.8 gigawatts of solar capacity in various stages of study, according to the most recent interconnection queue documentation.

“The duck curve is soon going to be the real threat,” Manghani said, referring to the net load pattern that emerged in California as solar penetration increased.

As variable wind and solar increase in Texas, ancillary services will gain in value, Prueher said. That will create new market opportunities for storage in the years to come, even if those revenue opportunities aren’t fully arrived today.

“Folks that understand not just how it can operate today, but over the life of the project, they have the vision to know that the regulatory structure is going to change,” Prueher said.

That echoes the sentiments of storage vendor Fluence, speaking in a recent GTM article about the U.K. storage landscape. That company designs systems for flexible service in the expectation that market opportunities will shift over the project’s lifetime.

FlexGen draws on its battle-tested control system and operational data to design systems with 20-year operating lives (longer than the 10- and 15-year systems included in Nevada's recent procurement). The controls enable shifting to different use cases, so the system doesn't have to choose between being a high-speed, short-duration ancillary services battery or a long-duration, time-shifting battery, Prueher said.

"We’re giving someone a dump truck that can drive around like a race car," he said. "That's better than a dump truck that just drives around like a dump truck."

FlexGen has been scaling with project revenue and a $25.5 million Series A from August 2015, which included investments from the venture arms of GE and Caterpillar. The company will seek additional financing later this year, Prueher noted.